Corn futures and options trading in Chicago more than doubled during September as the market’s rally above $5 a bushel for the first time in two years spurred speculative interest.

An average of 469,881 corn futures and options contracts changed hands last month at CME Group Inc., up 120 percent from a daily average of 213,237 during the same month in 2009, the exchange said in a monthly report.

Corn led a surge in agricultural trading at CME, where bull markets in cattle and hogs this year also prompted heavy buying from hedge funds, Wall Street banks and other speculators seeking better returns amid global financial turmoil and stock market volatility.

Among investors, “there’s a lot more enthusiasm for bullish markets than bearish markets,” said Sterling Smith, an analyst with Country Hedging, Inc., in St. Paul, Minn. Additionally, “we are seeing more money come into (commodities) from more-specific managed funds,” as opposed to index funds that track broad commodity indexes.

Overall, CME’s trading in agricultural commodities and “alternative” investments averaged 993,679 futures and options contracts a day, up 57 percent from a year earlier. For the first nine months of the year, agricultural trading rose 16 percent, to an average of 856,231 contracts a day, CME said.

Corn futures rallied 33 percent since the end of June after heavy August rains hampered crop development in parts of the Midwest and forced traders and analysts to scale back harvest expectations.

On Sept. 27, corn for December delivery reached $5.28 ¾ a bushel, the highest price for a closest-to-expiration contract since September 2008. In trading Monday, December corn rose 5 ¾ cents to $4.71 ½.

The corn futures contract is CME’s most actively-traded agricultural product, comprising nearly two-fifths of ag trading volume this year. Corn futures have been trading in Chicago since 1877.

In livestock markets, lean hogs futures and options trading averaged 41,610 contracts a day during September, up 23 percent. During the first nine months of this year, hog trading was up 19 percent.
CME live cattle futures and options trading averaged 63,956 contracts a day during September, up 36 percent from a year earlier. So far this year, cattle trading rose 34 percent, at an average of 53,926 contracts a day.

Livestock futures trading rose this year as shrinking herds and strengthening pork and beef demand fueled rallies, with hog prices reaching the highest levels in at least 14 years in May, based on the CME contract.

For all CME products, including contracts based on 30-year Treasury bonds and the Standard & Poor’s 500 index, September trading rose 14 percent, to an average of 12.1 million contracts a day.
Agricultural contracts account for about 7 percent of total CME trading.